Methods and systems of different complexity for pricing products exist. These methods and systems take into account the price sensitivity of customers. The price sensitivity is then used to establish sales strategies which seek to maximize revenue.
Since the price sensitivity of customers depends of numerous factors, of which many are difficult to predict or even totally unknown, a product is often priced incorrectly. If the price is set too low, this normally has the effect that the product is sold out too quickly. For the seller this means that he or she will lose revenue since a higher average price would most likely have been possible to achieve. If the price of the product is set too high, some or all of the products will remain unsold, which might translate into lost revenues for the seller. The risk of mispricing is especially high for perishable goods (e.g. transportation, events, and accommodation), since their value perishes at a certain point in time.
Incorrect pricing is often a result of having predetermined prices, as these fail to encompass actual demand. The effects of incorrect pricing have been experienced by almost every one of us in our daily lives. Sold-out or half-full airplanes, movie theatres, music concerts, as well as grocery stores shelves filled with expired provisions are all examples of prices being set either too low or too high. Even if some steps towards more demand-driven pricing have been taken by for instance granting last-minute discounts on tickets and the like, such methods are normally based on predetermining prices based on historical data and/or the practical experience of the seller. Consequently, there is a need to develop better techniques for pricing perishable goods.